Trick or trend: Global inflation soars making Fed’s task in U.S. harder

Trick or trend: Global inflation soars making Fed’s task in U.S. harder

Inflation isn’t solely a U.S. phenomenon. Which makes the Federal Reserve’s efforts to control inflation even harder. Inflation in the European Union hit a record 8.1% in May. The spread in the nineteen country group between the country with the lowest rate of inflation (Malta at 5.6%) and the highest (Estonia at 20.1%) also rose to the widest since . The gap between the highest and lowest inflation rates among the currency bloc’s 19 members has also jumped to its widest ever since the start of the euro in 1999. Meanwhile, inflation in Turkey hit a 23-year high of an annual 73.5% in May

China’s exports rise more than expected adding to optimism on global economic growth

China’s exports rise more than expected adding to optimism on global economic growth

Continuing last Friday’s trend—when U.S. financial markets rallied after deciding that economic growth in the United States might just be strong enough to offset any slowdown from a Federal Reserve taper—today global financial markets are rallying on optimism about the global economy after China reported a 12.7% increase in exports in November over November 2012. Economists surveyed by Bloomberg had projected a 7% gain in exports.

A slight pause in the growth is stronger than expected story

Relative good news economic growth stories, according to this morning’s OECD report, include the United States, China, Mexico, Brazil, and Indonesia

According to this morning’s economic outlook from the OECD, for the developed economies as a whole, growth will fall to 1.6% in 2011 (from a not so impressive 1.8% in 2011) and then “recover” to a 2.2% growth rate in 2013. The world’s developing economies will, once again, do much better.